How the Housing Affordability Crisis is Impacted by #SmashedAvo
In case you missed it, #SmashedAvo is a trending topic, and you might be surprised to hear it’s because of Australia’s housing affordability crisis. As you know, our nation is currently experiencing a shortage of affordable free-standing houses, particularly in Sydney and Melbourne. This means that potential first-home buyers cannot find suitable housing in locations of their choice, which is leading to the demise of the Australian Dream. But, is the humble avocado really to blame? We weigh in on the debate and discuss everything you need to know about this issue.
#SmashedAvo, First-Home Buyers and their Parents
Last week, social commentator, Bernard Salt, suggested that Millennials cannot enter the housing market because they spend their savings on lavish lifestyle choices. He commented that he’s witnessed young people order $22 smashed avocado dishes, and believes such spending habits are Millennials’ downfall. But, the fact remains, even if young people were to forgo their smashed avocados, most would still be unable to afford a house like their parents could at the same age. That’s because, spending habits are simply one factor contributing to the housing affordability crisis.
So, should parents help their kids get into the market? It’s a good point raised in this ongoing debate, and the general consensus is that if parents are in a position to help, then they should. The simple fact is, if more parents provide loans or go in as guarantors for their children’s mortgages, more Millennials can achieve the Australian Dream. Another option is for Millennials to move back in with their parents to help save for a down payment which, in most cases, is not the most appealing solution for either party.
How the Government is responding
Fortunately, Treasurer Scott Morrison has declared that housing affordability is finally an “important policy focus”. This means that measures will soon be in place to help protect the Australian Dream. The Treasurer said that first-home buyer barriers, including complex planning regulations, inadequate land release, infrastructure cost and availability, urban infill attitudes, and geographic constraints, will all be addressed. Essentially, the Government plans to solve the crisis by encouraging State Governments to release more land, remove prohibitive zoning laws, and build more houses. Only time will tell whether these are the solutions we need.
But, #SmashedAvo and Regulations are not solely to blame
Meanwhile, the real estate industry believes that Millennials’ spending habits and the Government’s prohibitive regulations cannot be blamed for the housing affordability crisis. According to property experts, the main cause is simply housing demand continues to surpass housing supply. For example, in Sydney and Melbourne where there is a shortage of houses, prices continue to rise, which makes it harder and harder for buyers to enter the market. So, what’s the solution according to the industry? A combination of improving First Home Owner Grant flexibility, increasing incentives for buyers to invest in regional centres, and teaching Millennials how to save.
Whether you are a buyer, renter or agent, Australia’s housing affordability crisis impacts everyone. There’s no telling how and when the crisis may end but, as real estate professionals, it’s our job to remain aware of its effects, including what part #SmashedAvo has to play.
How do you think we can solve the Housing Affordability Crisis?
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